Report
Annual Report and Accounts 2021 to 2022
The Gambling Commission's 2021 to 2022 Annual Report and Accounts.
b) Retirement benefits
The following disclosures are made in accordance with IAS 19, 'Employee Benefits'.
Employees
The Principal Civil Service Pension Scheme (PCSPS) and the Civil Servant and Other Pension Scheme (CSOPS) – known as ‘alpha’ – are unfunded multi-employer defined benefit schemes, but the Gambling Commission is unable to identify its share of the underlying assets and liabilities. The scheme actuary valued the PCSPS as at 31 March 2016.
You can find details in the resource accounts of the Cabinet Office: Civil Superannuation (opens in new tab).
For 2021-22, employers' contributions of £3,594,657 were payable to the PCSPS (2020-21 £3,789,953) at one of four rates in the range 26.6 percent to 30.3 percent of pensionable earnings, based on salary bands.
The Scheme Actuary reviews employer contributions usually every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2021-22 to be paid when the member retires and not the benefits paid during this period to existing pensioners.
Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employers’ contributions of £40,776 were paid to one or more of the panels of three appointed stakeholder pension providers. Employer contributions are age-related and ranged from 8 percent to 14.75 percent.
Employers also match employee contributions up to 3 percent of pensionable earnings. In addition, employer contributions of £0, 0.5 percent of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service or ill health retirement of these employees.
Contributions due to the partnership pension providers at the balance sheet date were £342,853. No contributions were pre-paid.
Former Director General – OFLOT
Upon the merger between the Gambling Commission and the National Lottery Commission in 2013, the Gambling Commission inherited a pension liability for a former Director General of OFLOT from 1993 to 1998. This pension is an unfunded defined benefit scheme which has benefits by analogy to the PCSPS and is paid directly from the Commission's own funds. In 2001, upon the recipient reaching retirement age, pension payments commenced.
A full actuarial valuation of both schemes was carried out by the Government Actuary at 31 March 2022 and the present value of the liability at 31 March 2022 is £213,000.
Sensitivity analysis
- 1. Increasing the discount rate by 0.5 percent would result in a corresponding decrease in liabilities of approximately £8,000 or 4 percent.
- 2. Increasing the Consumer Prices Index (CPI) inflation assumption by 0.5 percent would result in a corresponding increase in liabilities of approximately £8,000 or 4 percent.
- 3. Increasing assumed life expectancies in retirement by around one year would result in a corresponding increase in liabilities of approximately £8,000 or 4 percent.
The opposite changes in assumptions to those set out previously would produce approximately equal and opposite changes in the liability. Similarly, doubling the changes in the assumptions would produce approximately double the changes in the liability.
The sensitivities show the change in each assumption in isolation. In practice the financial assumptions rarely change in isolation and given the interdependencies between them, the impacts of such changes may offset each other to some extent.
Under IAS 19 the Commission is required to show the present value of these liabilities on its Statement of Financial Position.
Financial assumptions
The main financial assumptions and life expectancy assumptions used by the actuary in calculation of the liability for the schemes are as follows:
| Data definitions | 31 March 2022 (percentage) |
31 March 2021 (percentage) |
|---|---|---|
| Discount rate for scheme liabilities | 1.55% | 1.25% |
| Rate of increase in salaries | 2.90% | 2.22% |
| Rate of increase for pensions in payment, in line with inflation | 2.90% | 2.22% |
| CPI inflation assumption | 2.90% | 2.22% |
Life expectancy at retirement
| Current pensioners | As at 31 March 2022 | As at 31 March 2021 | ||
|---|---|---|---|---|
| Exact age (years) | Men (years) | Women (years) | Men (years) | Women (years) |
| 60 | 27.0 | 28.6 | 26.9 | 28.6 |
| 65 | 22.1 | 23.8 | 22.0 | 23.7 |
Last updated: 5 November 2024
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